European shares flat as healthcare, energy stocks offsets earnings bump By Reuters

© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 6, 2024. REUTERS/Staff

By Shristi Achar A

(Reuters) -European shares were flat on Wednesday as the effect of easing government bond yields and gains in companies with upbeat earnings reports were offset by a slide in healthcare and energy stocks.

The pan-European index was unchanged at 486.66 points as of 0947 GMT.

TeamViewer’s shares jumped 7% to the top of the benchmark index after the German software developer reported higher-than-expected fourth-quarter revenue and earnings.

Energy companies were at the forefront of an earnings-heavy session, with shares of Vestas rising 5.8% after the Danish wind turbine maker beat fourth-quarter operating earnings forecasts.

On the flip side, Equinor shed 5.2% after the Norwegian oil and gas producer said it would cut its overall cash returns to shareholders this year by $3 billion.

TotalEnergies (EPA:) also slipped 1.4% after the French group’s net adjusted income fell in the fourth quarter, mainly due to lower oil prices and refining margins.

The oil and gas sector slipped 0.3%.

Of the 85 STOXX 600 companies that have reported earnings so far, 55.3% have beaten analyst estimates, LSEG data showed.

Heavyweight healthcare stocks were also a drag, falling 0.4%. They were weighed down by Zealand Pharma (NASDAQ:), whose 7% slide was set to its biggest in nearly a year.

Automobiles led sectoral gains, with their 1.7% increase helmed by Italian automaker Stellantis (NYSE:)’ 2.6% jump to a record high.

On the day’s data front, German industrial production fell more than expected in December, marking the seventh monthly decline in a row.

The yield on the German 10-year government bond eased slightly after the data and was last at 2.284%, helping cushion equities. [GVD/EUR]

“The higher interest rates have been worse on the European economies because the U.S. (also has) a lot of fiscal stimulus measures into the mix and Europe has not been able to do that,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.

“Every single development out there hints that the European Central Bank should be the ones to (ease) interest rates.”

However, ECB board member Isabel Schnabel said in an interview that the central bank must be patient with cutting rates as inflation could flare up again and recent data confirm fears that the ‘last mile’ of getting price growth down will be the hardest.

Among other movers, DHL lost 3.8% after Germany’s state-owned KfW bank sold 50 million shares in the group for 2.17 billion euros.

Handelsbanken rose 6.0% after the Swedish lender proposed a higher-than-expected dividend.

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